Unemployment Rate Drops to Lowest Since 2008; No Change in Joblessness

The U.S. economy added 146,000 jobs in November, and the unemployment rate fell 0.2 percentage points to 7.7 percent – the lowest in nearly four years, the Labor Department reported Friday. But the number of unemployed persons remained largely unchanged at 12 million.

The unemployment rate fell from 7.9 percent to 7.7 percent, the lowest since December 2008, but mainly because workers dropped out of the labor force. The participation rate fell to 63.6 percent, according to the Labor Department figures.

More than one-third of the job gains came from retailers, which can be attributed to Christmas season hiring. Employment also increased in professional and business services, and health care.

The number of long-term unemployed (for 27 weeks or more) also changed little at 4.8 million.

The drop in the unemployment rate was reported amid concerns that Hurricane Sandy would have a negative impact. "Our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November," the Labor Department said, adding that the Superstorm's impact might be more accurately reflected in next month's report.

"Initially you might get a temporary dip, but certainly you'd expect Sandy reconstruction and the housing turnaround would begin to feed through into much more positive construction employment figures," CNN Money quoted Paul Ashworth, chief U.S. economist for Capital Economics, as saying.

In addition to Sandy's impact, there will be concerns over the approaching "fiscal cliff."

"I don't know that the apparent good news in this report is going to carry over into next year," Mark Vitner, senior economist with Wells Fargo Economics Group, told Palm Beach Post. "The fiscal cliff uncertainty will lead to weaker numbers in December and early next year."

Vitner added that the calendar may have resulted in a more favorable employment report because November had five weeks of data and the survey came late in the month.

"The question moving forward will be how the antics in Washington impact hiring for December and the first quarter of 2013," CNBC quoted Todd Schoenberger, managing partner at LandColt Capital, as saying. "Those concerns will keep investors on the sidelines until resolution on the fiscal cliff occurs, and if revisions confirm November's gains in employment."

On some optimism visible in the market after the jobs report, Austan Goolsbee, President Barack Obama's former economic adviser, told Fox Business that the market "appears to me to be taking a little too much positive."